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Demoulas board eyes CEO ouster

The Lowell Sun

Updated:
07/11/2013 06:35:58 AM EDT

Sun Staff Report

LOWELL -- Market Basket CEO Arthur T. Demoulas could be fired at a meeting next week, according to a report published Wednesday.

A Suffolk Superior Court judge has ordered a company meeting to be held July 18, when a majority of the board comprising a faction of the Demoulas family that opposes the way its CEO has been running the business is expected to vote on his ouster, The Boston Globe reported.

According to the report, that side of the family is accusing Arthur T. Demoulas of spending money recklessly, including transactions with companies owned by his wife and brothers-in-law.

A woman who answered the phone for a Tewksbury number listed for Demoulas said no one was available Wednesday night to comment. In the Boston Globe report, he said Market Basket has performed well under his tenure, with a 2012 net income of $217 million on $4 billion in revenue.

The families of founders George and Telemachus Demoulas have battled over the supermarket company for years.

In 2011, three Demoulas family members sued three company trustees alleging a profit-sharing plan caused the loss of $46 million. Arthur S. Demoulas (son of George Demoulas), Fotene J. Demoulas and Diana D. Merriam, three company shareholders, sued Arthur T. Demoulas (son of Telemachus "Mike" Demoulas), William F. Marsden and D. Harold Sullivan.

The lawsuit claimed the defendants breached their duties by authorizing "two utterly irresponsible investments" that lost millions of dollars.

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In 1997, the courts ruled that heirs of George Demoulas had been cheated out of millions by Telemachus Demoulas -- George's brother -- and his heirs. The original ruling withstood two later appeals.

Arthur S. Demoulas couldn't be reached late Wednesday night.

The Boston Globe report said Arthur S. Demoulas' side recently gained control of the company's board and has begun pressing for Arthur T. Demoulas' removal. The fight landed in Suffolk Superior Court after board members who support Arthur T. Demoulas failed to appear for board meetings to consider his removal, according to the report.

Without a quorum, no votes could be held. A judge ordered a meeting to be held next Thursday.

Market Basket, which began in the Acre neighborhood of Lowell, now includes 71 stores in Massachusetts and New Hampshire, and plans to soon open its first store in Maine, according to the company's website.

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